Athens Water 2008 profit falls on drought costs

* Net profit down 28 pct at 31.2 mln euros

* Extra cost to pump water from reservoirs to Athens

* Expects 2009 to be good year for water reserves

ATHENS, March 30 (Reuters) - Athens Water Supply and Sewerage (EYDr.AT), Greece's biggest water utility, said profit dropped last year due to higher costs to avert water shortages in the Greek capital.

Net income fell 28 percent to 31.2 million euros ($41.3 million), the company said in a statement on Monday.

Costs rose by 11 percent to 226.7 million euros, EYDAP said, partly because it spent more money on electricity to pump water from its Yliki reservoir. The Yliki pumping was part of measures to avert water scarcity, the statement said.

The company said this month that 2009 was expected to be a "good year" for reserves, after three consecutive years of poor rainfall.

EYDAP, 61 percent state-owned, will propose a dividend of 0.13 euros a share, down from 0.14 euros in the previous year.

Last week, the government said it was looking for a strategic investor for Greece's second-largest water utility, EYATH (TWSr.AT), as part of plans to raise 1 billion euros this year. (Reporting by Harry Papachristou, editing by Will Waterman)